On July 4, 2025, the San Francisco County government convened to discuss two significant Mills Act historical property contracts aimed at preserving the city's architectural heritage. The Mills Act allows local governments to enter into ten-year rolling contracts with owners of qualified historic properties, providing them with property tax reductions. These savings can then be reinvested into rehabilitation and maintenance efforts, ensuring the preservation of San Francisco's historic landmarks.

Currently, the city holds 46 active Mills Act contracts, which encompass a variety of property types, including single-family homes, multifamily residences, and commercial buildings. The planning department has been conducting an audit of the Mills Act program, with findings and policy recommendations expected to be presented to the Historic Preservation Commission in January 2024.

The first property under consideration is located at 988 Market Street, a significant eight-story office building designed in the Renaissance Revival style. The owners plan to convert the building into 45 residential units, a move supported by the Historic Preservation Commission due to the property's historical significance and the owners' commitment to invest over $576,000 in rehabilitation costs. This investment includes restoring the building's facade and other critical structural elements.

The second property, 2209 Webster Street, is a single-family residence designed in the Italianate style. The current owners, who have converted the building from a medical office back to a residence, plan to invest approximately $238,000 in rehabilitation efforts. Their commitment to restoring the property aligns with the Mills Act's goals of preserving historic character while contributing to the city's housing supply.

During the meeting, Supervisor Peskin announced plans to introduce resolutions that would place these Mills Act contracts into non-renewal status after their initial ten-year term. This means that while the property owners will still be required to complete their rehabilitation plans, the contracts will not automatically renew, effectively phasing out the tax benefits over time.

The discussion also highlighted broader concerns regarding the Mills Act program, particularly the need for a more stringent evaluation process for properties seeking tax relief. Some supervisors expressed apprehension about the potential for significant tax savings for high-value properties, suggesting that the current system may disproportionately benefit owners who may not require financial assistance to maintain their historic buildings.

As the city grapples with budget deficits, the implications of the Mills Act and its impact on property taxes and public funding will continue to be a topic of debate. The upcoming recommendations from the planning department are anticipated to address these concerns, aiming to balance the preservation of San Francisco's rich architectural history with the city's fiscal responsibilities.